Why Car Companies Release New Models Earlier: The Business Strategy

Have you ever noticed that car companies often unveil new models or updated editions much earlier than the official release date?

As a general rule, this practice is primarily driven by the need to capture market share. By releasing new models early, manufacturers can gain a competitive edge and increase their chances of meeting consumer demand and staying ahead of the competition.

Historical Context: The 1960s and Early 1970s

Back in the 1960s and early 1970s, car manufacturers started putting out new models roughly halfway through the year. For instance, my first car was a 1963 1/2 Ford Falcon. These vehicles were typically released about six months ahead of the full model year to capture initial interest and gather valuable feedback from the public.

Pulling Forward Releases for Market Capture

One of the primary reasons car companies release new models early is to capture as much market share as possible. By bringing out new models earlier, they ensure that the car is available for consumers to see and test drive well before the official release date. This helps to generate buzz and excitement around the vehicle, potentially leading to higher sales.

Another common practice is for car companies to simply slap the new model year number on an existing vehicle to give it a fresh look and increase perceived value. This strategy leverages consumers' perception that newer models are better, and thus, more appealing.

The Tip-Point and Confidentiality Concerns

Another significant reason for releasing new models early is the tipping point. Once a car model is seen by a significant number of people, including suppliers, dealers, and the aftermarket community, it becomes nearly impossible to keep the details confidential for much longer. By releasing the car and focusing on presenting it in the best possible light, car manufacturers can maintain a professional image and avoid the negative publicity that can come from leaked unattractive images or designs.

For instance, car companies don't want leaked photos to be their advertising, as they might distort the public perception of the vehicle. Thus, releasing the car early and with aesthetic care helps in maintaining a positive image.

Strategic Release Timing

The timing of the model years comes earlier than the actual year to strategically align with peak sales periods. In the United States, the biggest car sales occur in December. Hence, it makes sense to have the latest models out and production ramped up by late fall to ensure the vehicles are ready for the holiday season.

Manufacturers often bring out new models early in the year, well before the official model year, to capture consumer interest and ensure there is enough time to ramp up production by the key sales months. By doing so, they can meet the demand for new models during the holiday buying season and enter the new model year with a strong product lineup.

The Competitive Game of Being First

Releasing new models early is also a game of being the first to the market. Just like in political primaries where being the first to declare candidacy can have a significant advantage, car manufacturers see an opportunity to be the first to release their new models. This strategy helps them gain a leg up on their competitors, attract early buyers, and generate buzz that can last throughout the year.

In conclusion, the timing of new car model releases is a strategic decision that car companies make to capture market share, generate buzz, and ensure they are ready to meet consumer demand. By releasing models early and tailoring their strategies to align with peak sales periods, car manufacturers can stay ahead in the competitive automotive market.